CenturyTel's system allows it to observe and analyze the online activities of its Internet customers, keeping tabs on every Web site they visit. The equipment is made by a Silicon Valley start-up called NebuAd Inc. and installed right into the phone company's network. NebuAd takes the information it collects and offers advertisers the chance to place online ads targeted to individual consumers. NebuAd and CenturyTel get paid whenever a consumer clicks on an ad. This technique -- called behavioral targeting -- is far more customized than the current method of selling ads online. Today, it's an imperfect process: companies such as Revenue Science Inc. and Tacoda Inc., which was recently bought by Time Warner Inc., contract with Web sites to monitor which consumers visit them, attaching "cookies," or small pieces of tracking data, to visitors' hard drives so they are recognized when they return. The targeting firms feed the data to Web site owners, who use it to charge premium rates for customized ads. But the information is limited, since the tracking companies can't monitor all of the sites an individual visits.
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